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One way to avoid the whole stock option / RSU mess is to structure your company as a C-corp that is wholly owned by an LLC, and give your employees membership u
by SeoxyS 12y ago
One way to avoid the whole stock option / RSU mess is to structure your company as a C-corp that is wholly owned by an LLC, and give your employees membership units in the LLC. This is a very unusual setup and it'll take a good lawyer to help you get it right; but the benefits are huge for employees who own stock, because there are zero tax liability and zero purchasing price until the ownership produces a return.
- mooredinty 12y agoIn some states LLC members are not allowed to take salaries. They can only take guaranteed payments, which have other tax implications
- walterbell 12y agoAre there any published references on this technique, or a law firm that is well-versed in it?
- SeoxyS 12y agoI don't know of any public resources on the topic, or of any law firms that are particularly adept at this. However, I have seen it done in practice. I'd recommend talking to a law firm that's well versed in startup corporate law. The big firms Cooley and Orrick come to mind.